Calculating Life Insurance Needs

Most people at some point in their lives struggle with their finances. In today’s economy, it’s more common than ever. Americans today tend to think they can save some of that money by skipping out on life insurance. According to a LIMRA study, approximately 30 percent of US households have no life insurance coverage at all. Eleven million of those households have kids under 18. Not having a life insurance policy to protect your loved ones could put your family at risk if something unexpected happens.

Many people make mistakes when buying life insurance, like not purchasing enough to cover their needs. So how do you determine how much to buy? There are two simple ways to calculate how much life insurance you need.

Consider life insurance for income replacement. This way makes considerations for what you earn and your age. This produces a higher amount than basing it on your needs. It works like this: Start with your age and how many years of income you would need to replace if you die. For example, if you’re 50 years old, you would buy coverage that would pay 15 times your yearly income as if you worked to age 65. This approach does not take into consideration things like inflation, however, or any earnings you might have made if you worked after retirement.

The other way to calculate how much life insurance you will need is a needs-based approach. This basically accounts for how your death will financially impact your loved ones. You have to consider factors like your spouse and their source of income, how many children you have, mortgage payments left behind, debt and medical bills, for example.

Most people go with the needs-based approach simply because it is individualized to their exact needs. You can weigh more factors that affect your family directly and feel more secure knowing there will be no unexpected financial burdens if something happens to you.

About Us

*$1 pays for the first month of children’s coverage. Then the rate
is based on your child’s present age and is guaranteed to stay the
same for the rest of their life.
Policy Form # GWL2001 or GWLA001
*$1 pays for the first month’s adult coverage. Then the rate
schedule is based on your current age and is guaranteed for the life of
the policy.
Policy Form # SRTCV/SRTCV13. Offer may vary.
**A.M. Best Company rating as of
7/18 based on financial strength, management skill and integrity. For the latest rating, access
www.ambest.com.

Globe Life has been protecting America’s families since 1951

Globe Life continues to receive an A+ (Superior)** rating from A.M. Best Company
based on their latest analysis of Globe Life's financial strength, management skills
and integrity. (rating as of 7/18)